the dog and B is subsequently bitten he can have no redress against A. B could recover damages from A, however, if he had not been given notice. 239. B borrows A's automobile. When it reaches B's garage it is found that there is not room for it. Unless B can store it in some other place he would be bound to take his own automobile out to make room for A's. 240. B borrows A's stallion for breeding purposes. While driving the animal one day it drops dead. Note carefully the different results under varying circumstances. If B were driving the animal merely to exercise it, there would be no deviation from the purpose of the bailment and B would not be responsible for the loss. The result would be different, however, if it were shown that B had driven the animal faster or longer than was necessary to give it adequate exercise. So, B would have to bear the loss if he had been driving for any purpose other than for the benefit of the horse. If A had consented that B might drive to the post office for mail every morning and the animal had dropped dead when it was being driven to the post office in the evening, B would be liable. So B would have to stand the loss if he permitted a servant to drive the stallion to the post office in the morning unless A had given express or implied authority to B to intrust the animal to a servant. 202. Termination of bailment for sole benefit of one party.—A bailment for the benefit of one party only may ordinarily be terminated by either at any time. Where the bailment is for the sole benefit of the bailor the death or insanity of either party will terminate it. The same is true of a bailment for the sole benefit of the bailee except that where the article has been lent for a definite time the death or insanity of the bailor will not effect a termination. Where a bailee begins work on an object which he has undertaken to perform gratu itously, he is bound to finish it before returning the object to the bailor. EXAMPLE 241. B tells A that he will repair his watch free of charge. B takes the watch apart, but before repairing and putting it together he takes up a new form of employment and offers the watch to A. Upon request B refuses to complete the work. A may have the work completed elsewhere and hold B for the expense. 203. Creation of a pledge or pawn.—A pledge or pawn is a transfer of personal property to secure a debt or other legal obligation. The word pledge is often applied to the article thus transferred. If the security consists of shares of capital stock or of bonds it is more frequently termed "collateral security." The relation of pledgor and pledgee arises between a broker and his customer where the former buys stock for the latter and the latter puts up a margin which he agrees to keep good, but the same relation does not arise between a commission merchant and his customer for whom he buys grain for future delivery on margin which the customer promises to keep good up to the time of delivery. In the former case the stocks are actually bought by the broker, but in the second case the merchant has a mere executory contract of sale. This form of bailment requires delivery of the pledge, actual or constructive. The articles represented by warehouse receipts, bills of lading and savings bank deposit books may be delivered by the delivery of the respective documents of title. 1 Where the broker does not actually purchase the stock the transaction is illegal and is called "bucket-shop" dealing. 2 Corbett v. Underwood, 83 Ill. 324, 25 Am. Rep. 392. Ordinarily, the contract of pledge need not be in writing, but where it is embodied in a written instrument it will not be construed into an absolute sale, no matter how strong the language, if from the attendant circumstances it is evident that a pledge only was intended. 204. Construction and operation of pledge.-Unless the parties have otherwise expressly agreed, a pledge merely operates to give the pledgee additional security for his debt. The general property in the thing pledged remains in the pledgor, while the pledgee receives a special property which entitles him to hold the property subject to the terms of the pledge as against the pledgor, his general creditors and persons who obtain subsequent liens against it. The pledgor warrants his title to the thing pledged. The pledge covers not only the principal debt, but all interest and reasonable expenses incurred in caring for the pledged property. In the absence of special agreement, a pledge cannot be held to secure any debt other than the one for which it was deposited. Upon maturity of the obligation which the pledge secures, it must be paid or the pledge may be sold at public sale. Where, as is usual, the pledge is deposited under a written agreement giving the pledgee the right to sell at private sale a public sale is unnecessary. A pledgee may not purchase at his own sale. While a pledgee may retain any increase or income derived from the pledge, such as stock dividends, as additional security, he must account for it at the termination of the pledge. A pledgee is bound to use ordinary, as distinguished from great care or slight care, and will be absolutely liable for the loss or destruction of the pledge if he uses it except in so far as its use is necessary to its protection. The right to sell the pledge to enforce a debt is not barred by the lapse of a period sufficient to bar the debt under the statute of limitations. The pledgor and pledgee may assign their respective interests in the pledge. Certain forms of pledges or pawns, as, for example, those in which pawnbrokers engage, are regulated in many states by special statute. 205. Termination of pledge or pawn. The pledgor is entitled to a return of his property upon payment of the debt it secures or upon tender of payment. A mere offer to pay without actual tender is insufficient. If, upon the termination of the pledge, the pledgee refuses to surrender the property he is liable for conversion. In the absence of special agreement a pledgor is not entitled to a return of a part of his property in proportion to the size of the installments he may pay on account of the debt, but the pledgee will be justified in holding all the property till the entire debt is extinguished. If the pledgee sells part of the pledge and realizes enough to pay the entire debt and expenses, he will be bound to return the remainder. EXAMPLES 242. A borrows $500 from B and gives B a horse and wagon as security for the debt and interest. At the maturity of the loan A offers B $500 and demands the return of his property. B will be justified in holding the property till he has been paid the principal, interest and expense of keeping the horse and wagon. 243. A deposits a gold watch with B to secure a loan of $100 and gives B the right to sell the watch at public or private sale in case of A's default in the repayment of the loan. At the end of ten years B sues A for the loan and A successfully defends on the ground that the debt is outlawed by the statute of limitations. B, nevertheless, may sell the watch and in that way satisfy the debt. 244. A deposits five gold rings of equal value with B to secure a loan of $100. He repays $80 and demands the return of four of the rings. B may retain the five rings till the whole loan is repaid. 206. Hiring property for compensation.-Where one person desires the use of the personal property of another and is willing to pay for the use he is said to hire it. When the property is delivered a bailment called locatio rei begins. An executory contract looking to a bailment of this kind is enforcible in the usual way by either party by an action for damages in case of breach. 207. Caring for chattels, repairing or transporting them. In this form of bailment the compensation goes to the bailee for doing something to the subject-matter of the bailment for the benefit of the bailor while it is in the bailee's possession. The bailment, therefore, is for the mutual benefit of both parties and their duties in respect to the property are very similar to those which arise under the bailment spoken of in the preceding section. 208. Rights and duties of bailor.-A bailee who hires a chattel from another for his own use may rely on the latter's warranty of title and his covenant of quiet enjoyment. If the bailor is not the true owner and the bailee's special property in the chattels is disturbed he may sue the bailor for the breach of warranty. The bailor must use diligence to discover defects in the chattels and must notify the bailee of any dangerous qualities known to him but not apparent to the bailee. In the bailment for hire the bailor is entitled to the agreed compensation for the use of his property. If there is no express agreement or if the property is destroyed before the term of the bailment is completed without |